Riviera Apartments Coolum [2003] QBCCMCmr 382 (13 February 2003)

Last Updated: 7 September 2007

C G YOUNGREFERENCE: 0582-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17307
Name of Scheme:	Riviera Apartments Coolum
Address of Scheme:	123 - 125 Coolum Terrace, COOLUM BEACH QLD 4573

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

John Alfred CURTIS, as the owner of Lot 6,



C G YOUNGI hereby order that the body corporate must takes such steps as are necessary, at its sole expense, to carry out all necessary repairs to the roof terrace membrane and the walls of the building, to prevent any further water penetration into Lot 6.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0582-2002

"Riviera Apartments Coolum" CTS 17307

The applicant, John Curtis of Lot 6, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") that –

"An order that the Body Corporate for Riviera Apartments CTS 17307 is responsible for the maintenance of the roof to the building (including maintenance to prevent penetration of rain water and other natural elements into the building) apart from the maintenance of the roof terraces the subject of exclusive use to any lots in the building, which shall be limited to maintenance associated with the use of the roof terrace by owners and occupiers, and to the extent that by-law 41 is inconsistent with this order, by-law 41 shall be read down to give effect to this order."

JURISDICTION:

This is a dispute between an owner (the applicant John Curtis of Lot 6) and the body corporate (the respondent) concerning the performance of duties under the legislation, namely responsibility for the repair of the membrane situated on the roof terrace common property which is subject to a grant of exclusive use to the owner of Lot 6 (and two other lot owners). This is therefore a matter that falls within the dispute resolution provisions of the legislation (see sections 182(b), 183(1)(b), and 223 of the Act).

General powers of an Adjudicator in making an order:

Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

a)	a claimed or anticipated contravention of the Act or the community management statement; or
b)	the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
c)	a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1) of the Act).


APPLICATION AND SUBMISSIONS:
In accordance with the requirements of section 194 of the Act, a copy of the application was provided to the respondent body corporate (committee) and all other owners, with an invitation to respond to the matters raised in the application. Submissions were received from the Body Corporate Manager, Superior Body Corporate Management Pty Ltd, on behalf of the committee, and from the owner of Lot 2 (D Garma), the owner of Lot 4 (Permrac Pty Ltd – director K Pickering) and the owner of Lot 7 (K & M Pickering).

The applicant Curtis is one of three owners that enjoy grants of exclusive use over parts of the "roof terrace" which constitutes the roof of the scheme building. The grants to the owners of Lots 5, 6 and 7 cover virtually all of the roof area.
The waterproofing membrane has partially failed, resulting in rainwater leaks into the interior rooms of the applicant’s Lot 6. The membrane has failed in the past but the body corporate has been successful in having the builder rectify the fault, however the applicant believes that as the building is now 8 years old the builder cannot be held responsible.

The Body Corporate Manager has informed the applicant that, under the conditions set out in By-law 41, he and not the body corporate is responsible for the repair of the membrane. The applicant submits that the by-law condition relating to maintenance should not be read to include repairs to the roof itself, including the membrane, and the body corporate remains responsible for the repairs.


DETERMINATION:
"Riviera Apartments Coolum" was registered as a building units plan (now termed a "building format plan") on 29 March 1995 and comprises seven lots; the developers are shown as being Permrac Pty Ltd (current owner of Lot 4), John and Judith Curtis (applicant owner Lot 6), and Electrical Equipment Canberra Pty Ltd. (current owner of Lot 3).

On 9 June 1995, a change in the by-laws of the body corporate was recorded on the registered plan. By-law 41 of those by-laws, so far as it is relevant to this dispute, reads as follows –

BY-LAW 41 Exclusive Use – Roof Terraces.

(a) The proprietors for the time being of Lots 5, 6 and 7 in the building shall be entitled to the exclusive use and enjoyment of the roof terrace specified in the plan annexed hereto ...

(b) Each proprietor to whom exclusive use and enjoyment of a roof terrace is given pursuant to this by-law shall use the roof terrace for normal living purposes only and shall not litter such area or use same to create a nuisance and each proprietor shall be responsible for the performance of the duty of the Body Corporate under Section 37(1)(c) of the Act at that proprietor’s expense.

I have underlined the conditions attaching to the grant of exclusive use. The advice of the body corporate (made through its Body Corporate Manager) in its facsimile letter of 30 July 2002 to the applicant’s property agent, is that the applicant is responsible under the by-law for the repairs. In its submission to this application, the body corporate states that it specifically relies on the last by-law condition, "each proprietor shall be responsible for the performance of the duty of the Body Corporate under Section 37(1)(c) of the Act". On the other hand, the applicant argues that this same condition should be read down to refer only to maintenance of the roof terrace and not the roof itself, that is, the owner need only maintain the area above the surface of the slab floor.

The law as to the whether responsibility lies with the owner or the body corporate in this situation, is not spelled out in the legislation. However, I have considered several similar disputes in favour of the owner on the basis of the following reasoning.

The respective maintenance responsibilities of the body corporate and owners are set out in the legislation as follows –

• In regard to owners, section 120 of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") generally requires that owners must maintain their own lot in good condition.

• In regard to the body corporate, section 109(1) of the Standard Module requires that the body corporate must maintain the common property in good condition, and structural common property in a structurally sound condition. There are also separate maintenance responsibilities regarding infrastructure (pipes, wires etc), which are not relevant here.

These general responsibilities are qualified by sections 109(2) and (3) which set out a number of instances where the maintenance responsibility, which would otherwise be that of the owner, is assumed by the body corporate. Section 109(2)(a)(iii), which I have highlighted, concerns membranes and is therefore relevant to this dispute -

Duties of body corporate about common property--Act, s 114

109(2) To the extent that lots included in the scheme are created under a building format plan of subdivision, the body corporate must--

(a) maintain in good condition--

(i)	railings, parapets and balustrades on (whether precisely, or for all practical purposes) the boundary of a lot and common property; and
(ii)	doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and
(iii)	roofing membranes that are not common property but that provide protection for lots or common property.

What can be said about roofing membranes is that –

• if the roof terrace is common property then the body corporate must maintain it under its general duty to maintain common property (see section 109(1) of the Standard Module); and

• if the roof terrace is part of a lot then the body corporate assumes responsibility for the maintenance of any membrane under section 109(2)(a)(iii) of the Standard Module.

The rationale for section 109(2)(a)(iii) is obviously that a membrane provides protection for not only the floor of the lot itself, but also for all of the lots and the common property (walls, stairways, pipes, wiring etc) sited in the levels of building beneath it.

However, the section does not specify membrane maintenance responsibility where the roof terrace is common property that is subject to a grant of exclusive use, as in this dispute. I understand that this deficiency is to be remedied in impending amendments to the legislation (reflecting the views I express in these reasons).

In my view it would be absurd if the responsibility in such cases were to fall on the owner when should the membrane be on the owner’s lot, it is the responsibility of the body corporate. However, this view is subject to a consideration of any condition regarding maintenance that is included in the by-law granting the right of exclusive use.

In By-law 41, the relevant condition is that the owner takes up the responsibilities of the body corporate under section 37(1)(c) of the Building Units and Group Titles Act 1980 ("BUGT"), the legislation then governing community title plans prior to the commencement of the current Act on 13 July 1997. Section 37(1)(c) of the BUGT Act sets out the responsibility of the body corporate for the general maintenance of the common property, fixture and fittings, and personal property. It contains some assumptions of responsibility by the body corporate similar to section 109(2) of the Standard Module, but made no special provision for membranes at all, let alone for exclusive use areas.

In a recent decision ("Pisces Apartments" No.655-2001 issued 15 March 2002), I considered the impact of the following maintenance condition contained in an exclusive use by-law, on my general view that the body corporate should be responsible for membrane maintenance –

"shall be responsible for the maintenance and regular cleaning of their respective exclusive use areas." My comments in that regard were –

"In the context of section 109 which provides (as described earlier) that the body corporate is responsible for both common property membranes, and membranes that are part of an owner’s lot property, it is in my view absurd that an owner having exclusive use of a common property membrane should be responsible if the by-law imposes a general "maintenance" condition. It is my view that, unless the by-law specifies that the body corporate maintenance responsibilities include membrane maintenance, the term must be read down to refer only to maintenance of a routine nature. Included in this category of non-routine repairs along with roof membranes, would be other major repairs such as structural faults, foundation structure defects and roof repairs.

These major, non-routine items can be distinguished by the "whole-of-building" function which they provide. For example, the membrane on the roof terrace weatherproofs the whole building and not just the top residential level comprising Lots 11 and 12. It is therefore in the interest of all owners that they are assured that a membrane is repaired promptly, that an appropriate membrane is applied, and that it is applied professionally. The same can be said in respect of a roof covering a roof terrace where an owner has been given exclusive use of the roof terrace, in that the roof protects the whole of the building in the same manner that a membrane over an open slab does. Similarly, a crack in a roof slab can affect all of the building, as does a crack in a basement slab caused by foundation failure.

These items are the very items that have been specified in section 109(2) on the basis, I believe, of that "whole of building" protection function."

The key comment in the extract is that, unless an exclusive use by-law specifies maintenance duties of a "whole of building" nature as being the responsibility of the owner, then the responsibility falls on the body corporate. That is, the by-law condition must specifically state that the owner is responsible for the maintenance of the membrane, structural faults, foundation defects or roof repairs.

Clearly, the By-law 41 condition fails this test, as it does not specify the maintenance of the membrane as being a maintenance duty of the owner(s). That is, the reference to the body corporate duties under section 37(1)(c) of BUGT Act must be read down to exclude those areas of maintenance I have described as being of a "whole of building" nature.

The applicant’s reference to suspected cracking of blocks on the outside wall of the building, is clearly a matter for the body corporate to investigate and remedy, and the body corporate in its submission accepts that responsibility. The body corporate adds, however, that the owner has not advised it of the cracking otherwise it would have had the wall inspected and repaired as necessary.

The problems giving rise to the application are the failure of the membrane and the cracking of the building wall, and my order is confined to these issues. Accordingly, for all of the above reasons, my order is to allow the application in requiring the body corporate to carry out all necessary repairs to the membrane and wall to prevent further water penetration into Lot 6.

I would also point out that the applicant states in his grounds that the failure of the membrane is not the result of any act of the applicant – had that been the case, for example: puncturing the membrane by erecting some structure, laying tiles etc: damaging it with corrosive materials: or in some other manner, then the repairs would, to the extent of the damage caused, be the responsibility of the owner (see parallel in section 109(4) of the Standard Module). However, the body corporate did not repudiate the applicant’s assertion on this point and I made my order accordingly.